Canberra, Melbourne dominate new housing hotspots

The annual Population and Residential Building Hotspots report includes eight Melbourne suburbs in the top 20 hotspots including Docklands and the City of Melbourne.

Larry Schlesinger

The North Canberra suburb of Crace has been ranked as Australia’s hottest residential development zone, according to a new report by the Housing Industry Association.

The annual Population and Residential Building Hotspots report identifies the suburbs or areas in Australia which enjoy a combination of rapid population growth and a large value of new home building. It gives an indication of which locations are likely to experience a strong rise in residential construction activity over the coming years.

Tellingly, the report included eight Melbourne suburbs in the top 20 hotspots including Docklands and the City of Melbourne plus inner city and fringe suburbs at a time when some have concluded that Melbourne is at risk of an oversupply of new apartments.

“If there had been any questions around whether there would be sufficient demand for the large number of apartments built in inner Melbourne in recent times the [22.7 per cent] annual population growth figure for [Melbourne City] suggests there is,” said the HIA.

Crace, measuring 170 hectares and about 13 kilometres north of Parliament House in Canberra has been under development for the past five years through a joint-venture partnership between developer CIC Australia and the ACT government’s Land Development Agency.

The resident population is growing at annual rate of 58 per cent with $112 million worth of housing approved in the 2012/13 financial year.

The top three hotspots are all new Canberra suburbs. Bonner and Casey, suburbs to the north of Crace, have both achieved population growth of greater than 40 per cent per annum with more than $120 million of housing approved.

“The high rate of growth [for these Canberra suburbs] reflects a stage in the emergence of a new suburb whereby households are moving into their new homes in an area which had previously been unoccupied vacant land,” said the HIA.

The City of Melbourne, which includes the CBD and is the focus of high-rise apartment projects, ranked fourth overall and attracted the highest value of residential approvals among the top 20 - $385 million - with an annual population growth rate of almost 23 per cent.

There were four suburbs or areas from Perth, three from Sydney and two from Queensland in the Top 20.

To quality as a hotspot, suburbs or areas had to manage a population growth of greater than the national growth rate (1.8 per cent over the year to June 2013) and register residential building work approvals in excess of $100 million for regions in New South Wales, Victoria, Queensland and Western Australia; in excess of $50 million for South Australia; and in excess of $20 million for regions in the Northern Territory and the ACT.

In total 50 suburbs or areas made it on to the list based on these criteria.

“We have seen very strong leading indicators of activity in NSW and WA and also improving signs for Queensland. Many of these developments occurred in the second half of 2013 which falls beyond the cut-off date for inclusion in this year’s edition of the Population and Residential Building Hotspots report,” said the HIA.

“Nevertheless, this should pave the way for some big changes in next year’s edition, a situation that in itself highlights the ongoing healthy state of new residential construction this cycle.”